FDIC Rescinds Guidance On Multiple Re-Presentment NSF Fees

On April 10, the FDIC rescinded prior supervisory guidance addressing multiple non-sufficient funds (NSF) fees arising from the re-presentment of the same unpaid transaction. The rescinded guidance had previously outlined the FDIC’s supervisory approach under Section 5 of the Federal Trade Commission Act to institutions assessing repeated NSF fees when merchants or other third parties re-submitted declined transactions. 

The FDIC originally issued guidance on re-presentment NSF fees in 2022 and later revised it in 2023 to clarify its supervisory approach for corrective actions and lookback reviews. The guidance had warned that charging multiple NSF fees on the same transaction could raise unfair or deceptive acts or practices concerns where disclosures were not sufficiently clear or where consumers lacked a meaningful opportunity to avoid additional fees. In rescinding the guidance, the FDIC stated that the 2023 Financial Institution Letter had become “overly broad in scope” and created uncertainty regarding when disclosures concerning re-presentments could create unfairness concerns under Section 5 of the Federal Trade Commission Act. The original guidance had also drawn a legal challenge from a state bankers association arguing it should have been issued through notice-and-comment rulemaking; that case was dismissed but added pressure to revisit the policy.

Putting It Into Practice: The rescission does not give banks a free pass. The FDIC reminded supervised institutions that disclosures must "accurately reflect their practices" and comply with all applicable laws. Section 5 of the FTC Act remains on the books, state regulators continue to police junk fees, and class action plaintiffs have built a cottage industry around multiple-NSF-fee theories. Banks that quietly restored or never eliminated re-presentment fees should not assume the litigation risk has evaporated, even if examiner scrutiny eases.

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